# In the matter of Arena Superstructures Private Limited (IB)/875(PB)-2020

> NCLT judgment dated 2020-10-29. Citation: TCN-2020-NCLT-00321. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 29 Oct 2020
- **Citation:** TCN-2020-NCLT-00321
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arena-superstructures-private-limited-ib875pb-2020-948198a1

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Dhankalash Distributors Private Limited (Financial Creditor) against Arena Superstructures Private Limited (Corporate Debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor defaulted in repaying a principal amount of ₹1,50,00,000 together with interest, aggregating to ₹1,64,19,667 as of 24.03.2020.

## Facts

Dhankalash Distributors Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Arena Superstructures Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor allegedly defaulted on repaying a principal amount of ₹1,50,00,000, with interest aggregating to ₹1,64,19,667 as of 24.03.2020. An Inter Corporate Loan Agreement dated 28.11.2019 was in place, with disbursements of ₹1,00,00,000 and ₹50,00,000 made on 05.12.2019 and 10.12.2019, respectively. The Corporate Debtor was obligated to repay by 31.01.2020, with interest at 18% per annum and an additional 2% per month for default. The Financial Creditor issued notices of demand on

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has proved the existence of debt and default on the part of the …

**Ratio:** The legal principle applied is that under Section 7 of the IBC, if the Adjudicating

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**Reasoning:** The court reasoned that based on the loan disbursement documents and the agreement

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**Interpretation:** Section 7 of the IBC is interpreted to mean that the Adjudicating Authority

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**Application:** In this case, the court applied the ratio by examining the Inter Corporate Loan

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## Parties

- **Judges:** B.S.V. Prakash…; HEMANT KUMAR…
- **Appellants:** M/s. Dhankalash…
- **Respondents:** M/s. Arena…

## Timeline

- **2019-11-28 — Inter Corporate Loan…**: Inter Corporate Loan Agreement dated 28.11.2019 entered into between the Financial…
- **2019-12-05 — Loan Disbur…**: ₹1,00,00,000 disbursed by Financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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